The Five Key Components to a Portfolio Analysis Done Right

The Five Key Components to a Portfolio Analysis Done Right
Portfolio analysis is one of the pillars of successful category management. A portfolio analysis enables you to gain valuable insight into your market position, where to direct investments, how to enhance your own products, and the total category sales.

Utilizing the highest quality and sufficient market data, a comprehensive portfolio analysis helps increase sales, which then improves profitability and helps to achieve the organization’s strategic goals.

The five following aspects allow you to decipher whether your portfolio analysis covers enough different perspectives, or if a broader analysis would improve your understanding of the big picture which in turn could help you to draw more concrete conclusions. 

1. Reviewing the whole category: sub-categories & segments

Along with the category level, by reviewing the lower levels of the product hierarchy it becomes easier to outline the general market situation. By looking at sub-categories and segments you’ll understand what contributes to the total category growth, or alternatively where the market is fading.  Ask yourself, “Are we involved in where market growth is the highest?” Leading products are often following market trends, reflecting on broader phenomena and trends in their own categories is essential when looking for new potential. Household and shopper data tells its own enlightening story: the frequency of purchases between the number of households is a good indicator whether the growth strategy should focus on acquiring totally new buyers or the current customer base.  

2. Unlock and discover the differences between portfolios by reviewing suppliers

Beyond sales value and market share, the unit sales number illustrates the differences and dynamics between product portfolios. It’s beneficial to review the number of products in different segments, comparing the figures between suppliers. Here you can ask yourself, “Is our offering in line with others? Or would a wider portfolio promote growth to the level of the largest players?” An optimal portfolio also diminishes the risk of product cannibalization. This research strategy guides the way when deciding if growth should be achieved by market pioneering, staying the path, or would a niche market offer the best position.

3. Refine your analysis by reviewing brands and products

Near real-time brand-and product-level data of your own products help to drive category or product development which ensures better sales and added value for your own products as well as for the whole category. But what about shoppers? Was it a rather large number of shoppers, or the loyalty of shoppers that led to success? Understanding the changes in sales and purchase drivers can help to clarify any future plans and goals. Additionally, by analyzing a competitor’s brand and product sales you will gain a solid foundation for drawing further conclusions.  

4. Reveal opportunities for growth with a comprehensive market overview

With a tailor-made product series, interesting product attributes or a customized product tree the basis for market tracking and finding growth potential is in your own hands. Here you can ask yourself: “Am I involved in the right relevant trends, or is there an open spot on the market for a product that meets the current and future needs of customers?” Reflecting on market information, consumer needs, and your own strengths and opportunities helps you to figure out the direction in which to develop your portfolio.

5. The discord between sales and varying chains

Different assortments and customers are emphasized in different retailers and chains. By analyzing a retailer’s store chains, it is possible to find out what share of sales each chain covers. Here you can find out - How are sales in each chain developing? Are we over or under-represented in certain chains, and how about when compared to the retailer level? The portfolio may affect the assortment classifications and success in different chains. Chain analysis provides information about the position of e.g., different packaging sizes or possible needs for modification in the portfolio. In addition to your own commercial conclusions, chain reviews may support joint actions, where both your strategy and the retailer’s strategy should be taken into consideration.  

Analyse² provides data driven and AI based solutions to leading shopper-centric FMCG brands and retailers. To learn out more about Analyse² and our Category and Shopper Insight platform that will help your business grow profitably visit:

The Five Key Components to a Portfolio Analysis Done Right

The Five Key Components to a Portfolio Analysis Done Right
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